U.S. stocks slump on global growth concerns

NEW YORK - U.S. stocks slid Tuesday on heightened concerns that the global economy is slowing.

Industrial production in Germany, Europe's largest economy, dropped the most in five years and the International Monetary Fund trimmed its outlook for global growth this year and next.

The Standard & Poor's 500 index fell 25 points to 1,940 as of 3:25 p.m. ET. The Dow Jones industrial average dropped 234 points to 16,758. The Nasdaq composite fell 62 points to 4,393.

German industrial output fell 4 percent in August, far more than expected. The slump follows other disappointing economic reports and suggests Europe's economy will not recover as strongly as hoped in the third quarter, keeping a lid on the 18-country eurozone.

Germany's DAX finished 1.3 percent lower and France's CAC-40 lost 1.8 percent. Britain's FTSE 100 declined 1 percent.

The IMF trimmed its outlook for global economic growth this year and next, mostly because of weaker expansions in Japan, Latin America and Europe. The IMF said Tuesday that the global economy will grow 3.3 percent this year, slightly below what it forecast in July.

Despite signs of weakening growth elsewhere, the U.S. economy is strong enough to maintain its recovery, said Ed Hyland, global investment specialist at JPM Chase Private Bank.

"The U.S. can stand alone. We're pretty optimistic it will continue to grow even with the slowdown in Europe," Hyland said. He's also optimistic that Europe will avoid a recession, and the stimulus provided by the European Central Bank will help nudge the region back toward growth. Hyland said investors should take advantage of dips in the market to add to their holdings of stocks.

SodaStream said it isn't winning over enough new customers in the U.S. and reported preliminary sales results that fell short of Wall Street's expectations. The company's stock tumbled $5.76, or 21 percent, to $21.81.

General Motors had the second-biggest drop in the S&P 500 after analysts at Morgan Stanley cut their price target for the automaker from $29 to $27. The analysts predict that earnings will suffer in the short term as the company invests heavily in its production process. GM's stock fell $1.77, or 5.2 percent, to $31.98.

Keurig Green Mountain jumped after analysts at Goldman Sachs initiated their coverage of the stock with a buy rating, predicting its sales and earnings growth were poised to accelerate. Keurig's stock jumped $4.93, or 3.7 percent to $138.18.

The U.S. Federal Reserve is due to release notes on its latest meeting on Wednesday. Investors will be looking for signs of when the Fed might raise interest rates. The first rate increase is not expected until mid-2015.

Benchmark U.S. crude fell $1.49 to $88.85 a barrel in New York. Gold rose $5.10, or 0.4 percent, to $1,212.40 an ounce. Silver edged up 2 cents, or 0.1 percent, to $17.24 an ounce. Copper was little changed at $3.04 per pound.

U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.34 percent from 2.42 percent on Monday. That's close to its lowest level of the year.